A stronger summer season and lower channel inventory led to an estimated 15% YoY increase in RAC sales volumes in Q1 FY2027. ICRA projects sales volume of the Indian RAC industry to grow by 12-14% in FY2027, following an estimated volume contraction of 10-12% in FY2026.

• As per ICRA’s estimates, the Indian room air-conditioner (RAC) industry will rebound in FY2027 with a year over year (YoY) volume growth of 12-14% to 12.6-12.9 million units. This follows an estimated 10-12% decline in FY2026, when industry volumes moderated to 11.1-11.5 million units.
• The aggregate PBIT margin of ICRA’s sample set declined to 4.3% in FY2026 from 6.7% in FY2025, impacted by weak demand and the consequent under-absorption of fixed costs.